Elementary Statistics (12th Edition)

Published by Pearson
ISBN 10: 0321836960
ISBN 13: 978-0-32183-696-0

Chapter 5 - Discrete Probability Distributions - 5-2 Probability Distributions - Beyond the Basics: 23

Answer

a)1000 ways b)$\frac{1}{1000}$ c)499 d)-50 cents e)Craps is better.

Work Step by Step

a) In each selection there are 10 ways to select, threfore the number of selections: $10\cdot 10 \cdot 10=1000$ ways. b) Out of the 1000 possibilities 1 possibility would win us the prize therefore the probability is:$\frac{1}{1000}$. c)net profit=winning-bet=500-1=499 d) Expected value: $500\cdot\frac{1}{1000}+(-1)\cdot \frac{1000}{1000}=0.5-1=-0.5=-50 cents$ e)The 1 dollar bet on craps is better, it's expected value of -1.4 cents is a lot more than the lottery's -50 cents expected value.
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